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Nordson Corporation Reports Fiscal Year 2020 Third Quarter Results
WESTLAKE, Ohio, August 19, 2020 (BUSINESS WIRE) -- Copyright Business Wire 2020

Nordson Corporation (Nasdaq: NDSN) today reported results for the third quarter of fiscal year 2020. For the quarter ended July 31, 2020, sales were $538 million, a 4% decrease compared to the prior year's third quarter sales of $560 million. The diversity of our end market exposure and broad global customer base contributed to the sales performance in the quarter. The sales decrease was primarily organic, as the benefits from the recent acquisition of Fluortek were offset by unfavorable currency impacts.

Operating profit in the quarter was $112 million, or 21% of sales. Excluding non-recurring charges associated with cost structure simplification actions and the amortization of the step-up in acquired inventory, adjusted operating profit was $120 million, a 9% decrease compared to the prior year's adjusted operating profit. EBITDA, which is defined as adjusted operating profit plus depreciation and amortization, in the quarter totaled $148 million, or 28% of sales.

Net income was $87 million, and earnings per diluted share were $1.49. Adjusted earnings, which excludes non-recurring charges, discrete tax benefits of $12 million and a non-cash, non-operating pension settlement charge of $3 million, totaled $83 million, or $1.42 per share.

"Throughout the quarter, our team remained focused on protecting the health and safety of our employees and responding to the needs of our customers," commented Sundaram Nagarajan, president and chief executive officer. "At the same time, we made solid progress on our long-term strategic priorities by acquiring Fluortek, a high-quality medical company, and leveraging the next generation of the Nordson Business System - the NBS Next growth framework - to prioritize investments that will drive profitable growth and identify opportunities to simplify our cost structure."

Third Quarter Segment Results

Industrial Precision Solutions sales of $289 million decreased approximately 6% compared to the prior year's third quarter. Stable performance of those product lines serving consumer non-durable end markets was offset by weakness in sales of product lines serving industrial end markets. Operating profit, which included $3 million in structural cost reduction actions, totaled $75 million. Adjusted operating profit was $78 million, or 27% of sales, a decrease of 13% from the prior year adjusted operating profit.

Advanced Technology Solutions sales of $249 million decreased approximately 2% compared to the prior year's third quarter. The Fluortek acquisition increased sales approximately 2%, which was more than offset by organic volume declines and unfavorable currency impacts. Sales volume increases in test and inspection product lines serving electronics end markets and stable demand in medical product lines were offset by weakness in fluid dispense product lines serving industrial end markets. Operating profit, which included $3 million of structural cost reduction actions and the amortization of the step-up in acquired inventory, totaled $50 million. Adjusted operating profit was $53 million, or 21% of sales, which was in line with prior year profits.

Outlook

"Given the challenging macro-economic environment, I am very pleased with our performance in the quarter and the progress we are making in aligning the organization," Nagarajan stated. "We will continue to invest in these uncertain times and remain optimistic about the potential of the highly diversified and differentiated Nordson portfolio."

While the short-term environment remains difficult to predict, we expect fiscal fourth quarter revenue to be commensurate with to slightly better than fiscal third quarter revenue based on the current order entry trends and order backlog. Weekly order entry rates have improved from the lower levels experienced during the third quarter. Entering the fourth quarter, trailing four-week order entry is 93% of prior year levels and backlog totaled $423 million. Operating profit is forecasted to improve modestly in the fiscal fourth quarter compared to the third quarter, as cost reduction initiatives begin to deliver benefits.

Nordson management will provide additional commentary on these results and outlook during a conference call Thursday, August 20, 2020 at 8:30 a.m. eastern time, which can be accessed at https://investors.nordson.com. For persons unable to listen to the live broadcast, a replay will be available for 14 days after the event. Information about Nordson's investor relations and shareholder services is available from Lara Mahoney, vice president, investor relations and corporate communications at (440) 204-9985 or lara.mahoney@nordson.com.

Certain statements contained in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by terminology such as "may," "will," "should," "could," "expects," "anticipates," "believes," "projects," "forecasts," "outlook," "guidance," "continue," "target," or the negative of such terms or comparable terminology. These statements reflect management's current expectations and involve a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, U.S. and international economic conditions, financial, and market conditions, currency exchange rates and devaluations, possible acquisitions including the Company's ability to successfully integrate acquisitions; the effects of changes in U.S. trade policy and trade agreements; the effects of changes in tax law; and the possible effects of events beyond our control, such as political unrest, acts of terror, natural disasters and pandemics, including the current coronavirus (COVID-19) pandemic and the other factors discussed in Item 1A (Risk Factors) in the Company's most recently filed Annual Report on Form 10-K and on its Form 10-Q with the Securities and Exchange Commission, which should be reviewed carefully. The Company undertakes no obligation to update or revise any forward-looking statement in this press release.

Nordson Corporation engineers, manufactures and markets differentiated products and systems used for the precision dispensing of adhesives, coatings, sealants, biomaterials, polymers, plastics and other materials, fluid management, test and inspection, UV curing and plasma surface treatment, all supported by application expertise and direct global sales and service. Nordson serves a wide variety of consumer non-durable, durable and technology end markets including packaging, nonwovens, electronics, medical, appliances, energy, transportation, construction, and general product assembly and finishing. Founded in 1954 and headquartered in Westlake, Ohio, the Company has operations and support offices in more than 35 countries. Visit Nordson on the web at http://www.nordson.com, @Nordson_Corp, or www.facebook.com/nordson.


View source version on businesswire.com: https://www.businesswire.com/news/home/20200819005686/en/

SOURCE: Nordson Corporation">


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